UK Stocks Fall; WPP Down, Kingfisher Rises

123jump.com Staff
02 Jun, 2009
New York City

UK stocks declined on weak banking stocks. Strategic investor in Barclays sold stock only after holding the stake for less than seven months. Kingfisher net sales and earnings increased. The advertising giant WPP Plc fell after it reported 6.7% decrease in revenues in the first four months.

[R]6:00 PM London, 1:00 PM New York – UK stocks declined on weak banking stocks. Strategic investor in Barclays sold stock only after holding the stake for less than seven months. Kingfisher net sales and earnings increased. The advertising giant WPP Plc fell after it reported 6.7% decrease in revenues in the first four months.[/R]

Investors and traders took a note after Abu Dhabi based sovereign fund sold its stake in Barclays. The investment from the fund only seven months ago was termed as long term and investors worried whether the current surge in the market will continue or falter soon.

UK mortgage approvals increased in April to 43,201 from 40,038 in March according to the Bank of England. Gross lending dropped to £10.9 billion, the lowest in last nine years.

The Confederation of British Industry in a finance condition survey reported improving credit conditions. Net 20% of 75 respondents reported that credit access to new loans deteriorated compared to 36% respondents in March and 62% in January. Net 10% of respondents expect the conditions to improve and 10% to worsen, indicating net zero balance or indicating the credit access conditions to stabilize.

In London FTSE 100 Index closed lower 29.17 or 0.65% to 4,477.02.

Gainers & Losers

Barclays fell 13.5% to 273.50 after strategic investor in Abu Dhabi investor sold stake in the bank and booked a profit of more than 50% only after holding for seven months.

Kingfisher Plc increased 3.8% to 190.70 after it reported first quarter net sales increased 2.9%.

Ryanair Holdings Plc declined 2.5% to 3.56 euros after it reported annual loss of 169.2 million euros and predicted profit between 200 million and 300 million euros in the current fiscal year ending in March 2010.

Penna Consulting Plc increased 11% to 185 pence after it reported annual revenues increased 30% and net profit surged 176% to £6 million.

WPP Plc decreased 5.4% to 453 pence after it reported sales declined 6.7% in the first four months to April 2009. The company plans to reduce head count and cut operating cost as it faces tough financial year.

Earnings Review

GB Group plc, a British identity checking business said full-year sales rose 22.7% to £23.8 million from £19.4 million a year ago. Net profit in the year was £1.5 million or £1.8 per diluted share compared to net loss of £0.39 million or £0.5 per share a year ago.

GB Group plc, in the last one year traded as high as 36.00 pence in August 2008 and as low as 12.00 pence in March 2009. Based on the yesterday’s closing price of 23.75 pence the company has market cap of £20.26 million.

KCOM Group PLC, a provider of communications solutions to businesses and public sector said full-year sales fell 9% to £472.4 million from £517.3 million a year ago. Net loss in the year was £106.5 million or £20.7 per diluted share compared to net profit of £18.8 million or £3.64 per share a year ago.

Kingfisher plc, the Europe’s largest home-improvement retailer said first quarter sales rose 2.9% to £1.16 billion from £1.13 billion a year ago. Net profit in the quarter rose 90% to £61 million compared to net profit of £33 million a year ago.

Lookers PLC, a British car dealer said full-year sales rose 6% to £1.78 billion from £1.68 billion a year ago. Net loss in the year was £16.0 million or £8.82 per diluted share compared to net profit of £16.4 million or £9.05 per share a year ago.

Pennon Group Plc, a British water and waste company said full-year sales rose 8.9% to £952.9 million from £875 million a year ago. Net profit in the year fell 31.5% to £91.5 million or £26.2 per diluted share compared to net profit of £133.6 million or £37.9 per share a year ago.

Printing.com plc a provider of printing services to small business said full-year sales rose 7.4% to £14.5 million from £13.5 million a year ago. Net profit in the year fell 10.4% to £1.46 million or £3.27 per diluted share compared to net profit of £1.63 million or £3.51 per share a year ago.

Umeco plc, a British aerospace parts supplier said full-year sales rose 24% to £415.3 million from £335.2 million a year ago. Net profit in the year fell 36% to £14.6 million or £30.4 per diluted share compared to net profit of £22.7 million or £47.4 per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 39 increased, 59 declined and 4 were unchanged.

Barclays PLC decliners in the FTSE 100 index with a loss of 13.52% followed by losses in WPP PLC, of 5.37%, in Royal Bank of Scotland Group PLC, 5.22%, in Hammerson PLC of 4.98% and in Lloyds Banking Group PLC of 4.14%.

Kingfisher PLC led gainers in the FTSE 100 index with a rise of 3.75% followed by increase in Lonmin PLC of 2.95%, in Xstrata PLC of 2.91%, in Home Retail Group PLC of 2.89%, in SABMiller PLC of 2.59%.

Europe Markets Review

In London FTSE 100 Index closed lower 29.17 or 0.65% to 4,477.02, in Paris CAC 40 Index decreased 1.45 or 0.04% to close at 3,378.04 and in Frankfurt DAX index higher 1.50 or 0.03% to close at 5,144.06. In Zurich trading SMI increased 82.48 or 1.54% to close at 5,432.22.